Content owners bypass traditional pay-TV with encoding technology

Joseph O'Halloran | 04-04-2013

In what could be a worrying revelation for pay-TV operators, ABI Research has revealed that content owners are growing in importance as customers for video encoder and transcoders.

ABI’s Cloud Video and Video Hardware Research Service report notes that content firms such as HBO, Disney/ABC have always purchased some video encoders for primary distribution which feed into existing pay-TV systems but adds that they are increasingly investing in multi-format transcoders that support direct to consumer distribution.
This trend should be noted by the operators said Sam Rosen, ABI practice director. “Content owners will grow from 11% of the total encoder and transcoder market in 2012 to 17% in 2017, having already passed the importance of telco operators for use in traditional IPTV platforms… [Content owners’] role in distribution stems from both authenticated access offered as part of a retransmission agreement with a classical pay-TV operator, but will also increasingly include advertising supported free-to-wire services and some standalone content-owner bundles.”
Looking at the market in general, ABI expects the total encoder and transcoder markets to become over a $1.5 billion dollar market in 2017, with the market led by Arris/Motorola, Cisco, Ericsson, Harmonic, and Thomson Video Networks. In addition it believes that Envivio leads the file-based multiscreen market while Elemental Technologies leads the live multiscreen market.